- Nicholas Merten identifies key altcoin market metrics in stablecoins liquidity.
- Merten observed a striking correlation between stablecoins liquidity and altcoins market.
- Stablecoins liquidity has been bullish since the beginning of 2023.
According to Nicholas Merten, founder, and creator of the crypto YouTube Channel, DataDash, crypto prices will probably remain in their current region or correct downwards unless the stablecoins liquidity expands. Merten drew this conclusion from the historical correlation pattern between stablecoins liquidity and the altcoins market metrics.
In a video uploaded on YouTube, the DataDash founder explained his position using the trend patterns of stablecoins liquidity and altcoins price action. He revealed a striking correlation between both entities since 2019 when stablecoins became popular. Merten believes that stablecoins liquidity is the most fundamental element that would drive prices higher in the long term.
From the visuals in Merten’s uploaded video, altcoin prices were relatively flat during the periods of stablecoins liquidity stagnation. Similarly, when the stablecoins liquidity accelerated between 2020 and 2022, altcoins experienced their most bullish season. After the bullish season, the prices corrected, mirroring the slowing trend of the stablecoins liquidity metric.
The stablecoins liquidity metric has picked up again. Data from TradingView shows that the metric has been bullish since the beginning of 2023. As of the time of writing, the value of stablecoins liquidity was $83.54 billion. It has climbed above its 2022 high of $82.46, despite the altcoin market remaining in consolidation.
At the time of writing, the altcoin market valuation remained relatively low, dropping by over 78% from an all-time high (ATH) of $1.058 trillion, which it achieved in November 2021. The current value of the altcoin market is $229.56 billion, marking a significant upside potential for the altcoin market to post recovery.
For the first time since 2019, the stablecoins liquidity and the altcoin market are at variance, reflecting that historical data does not guarantee future outcomes. However, many analysts believe the current market trend is a build-up toward a bull run that the upcoming Bitcoin halving in 2024 could trigger.
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